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UK: fastest-growing economy in eurozone next year?

The UK could be the fastest-growing economy in the eurozone next year, with the recession predicted to continue in the economic block through to 2013.

Economics consultancy the Centre for Economics and Business Research has said that the European recession will mean only marginal growth is likely in 2014. In contrast, the GDP growth in the UK is forecast as 0.8 per cent for 2013 and 1.4 per cent for 2014, more than any other eurozone country.

“Even assuming that the problems of the euro do not cause an economic melt-down before the German elections next year, we are looking at a very weak economic outlook in Europe for the next two years” said Tim Ohlenburg, senior economist at Cebr and main author of the Global Prospects report.

Cebr European economic growth forecasts

(GDP growth in real terms)

2012

2013

2014

Eurozone

-0.7%

-0.4%

0.4%

Germany

0.7%

0.5%

1.2%

France

-0.2%

-0.3%

0.2%

Italy

-2.7%

-1.8%

-0.8%

Spain

-1.8%

-2.2%

-1.6%

UK

-0.1%

0.8%

1.4%

Source: Cebr

Germany is the only other country set to see growth next year according to the forecast, at 0.5 per cent this year and 1.2 per cent the following year.

Across the Eurozone as a whole, growth is predicted to fall by 0.7 per cent in 2012, 0.4 per cent in 2013, before seeing growth of 0.4 per cent of 2014.

“The economic situation in some parts of Europe is moving from bad to catastrophic” said Douglas McWilliams, chief executive of Cebr and co-author of the report. “There is a danger that the economic problems will spill over into social breakdown in many areas of Europe as unemployment soars and governments run out of money.”

The think-tank hasn’t ruled out a collapse in the eurozone and warns that this would make the economic recovery “distinctly worse.”